From billion-dollar losses to a bold restructuring, Honda shifts EV strategy, handing control to its R&D arm while doubling down on hybrids and software-defined vehicles.
Honda Motor Co. has announced a major restructuring of its electric vehicle (EV) operations following a $1.7 billion write-off linked to its US EV business. The company reported an operating loss of 267 billion yen for the period from April to December 2025, citing policy changes in the U.S. and impairment charges on EV models.
The automaker confirmed that the losses included write-offs of development assets resulting from changes to its EV line-up. Honda said it aims to resolve these losses within the current fiscal year while reassessing its EV portfolio and capital expenditure.
From 1 April, Honda R&D will take charge of automobile development and software-defined vehicle (SDV) functions. The company stated this move will allow it to respond more quickly to market shifts and technology trends.
Honda R&D, established in 1960, will play a central role in aligning product development with evolving customer preferences.
Executive Vice President Noriya Kaihara acknowledged the need for recalibration, noting that, given regional market conditions, they will carefully reassess the timing of EV introductions and revise previously planned initiatives.
Honda has already reduced its EV spending by 3 trillion yen while maintaining 2 trillion yen for software-defined mobility, reflecting its focus on SDVs. The company now expects slower EV market growth through the decade, a shift from earlier projections.
Despite this, Honda plans to double hybrid sales to 2.2 million units by 2030. It is working to cut the costs of its next-generation hybrid system by 50% compared to 2018 levels, while improving fuel efficiency by more than 10%.
